Pakistan’s FX reserves hit $21bn, GDP growth reaches 3.7% in FY26

October 19, 2026 (MLN): Pakistan’s foreign exchange reserves recovered to $21.5 billion as of October 9, 2026, while real GDP growth reached 3.7% in FY26, showing improvements in the country’s macroeconomic conditions, according to the State Bank of Pakistan (SBP).

Governor SBP, Mr. Jameel Ahmad highlighted the country’s improving economic outlook during high-level meetings with foreign investors and representatives of global financial institutions on the sidelines of the IMF-World Bank Annual Meetings held in Bangkok, Thailand, from October 12 to 17.

The meetings involved senior executives from JP Morgan, Citibank, Jefferies, Deutsche Bank, Barclays, Bank of America, MSCI, Standard Chartered, and Mitsubishi UFJ Financial Group. The Governor also met bilateral and multilateral partners, other central banks, and global credit rating agencies.

Mr. Jameel Ahmad stated that sustained and prudent macroeconomic policies, along with structural reforms, have strengthened Pakistan’s resilience against domestic and external shocks.

Inflation declined sharply from elevated levels in FY23 to nearly within the target range in FY26, despite a significant oil price shock. Meanwhile, economic growth gradually recovered following a contraction in FY23, reaching 3.7% in FY26. GDP growth is projected to range between 3.5% and 4.5% in FY27.

The Governor noted that SBP’s official foreign exchange reserves recovered from less than $3bn in February 2023 to $21.5bn by October 9, 2026. The central bank’s forward liabilities also declined from more than $5.7bn to less than $1bn.

These improvements were largely driven by SBP’s foreign exchange purchases, while the country’s external debt stock increased only marginally over the past three years. The purchases were supported by an almost balanced current account in FY26.

Regulatory reforms introduced by SBP, particularly those concerning exchange companies and measures to channel remittances through formal channels, have also improved interbank foreign exchange liquidity.

The central bank expects foreign exchange purchases to continue, with the current account deficit projected to remain contained within 0% to 1% of GDP in FY27.

Pakistan’s fiscal position has also strengthened, with the primary fiscal balance recording a third consecutive annual surplus in FY26. Consequently, the public debt-to-GDP ratio has continued on a downward trajectory.

Mr. Jameel Ahmad further informed investors that a Staff-Level Agreement had been reached with the IMF on the reviews under the Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF).

He said continued implementation of the reform agenda had improved investor confidence, supported upgrades to Pakistan’s sovereign credit ratings, and facilitated access to global capital markets despite a challenging global environment.

The Governor emphasized that Pakistan’s economic fundamentals remain strong, supported by a prudent policy mix that has cushioned the impact of multiple shocks over the past three years.

While ongoing geopolitical developments present challenges, he said the economy is now in a significantly stronger position to withstand external shocks than during previous periods of stress.

Mr. Jameel Ahmad reaffirmed SBP’s commitment to preserving macroeconomic stability, strengthening external buffers, and advancing structural reforms to support sustainable economic growth.

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